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Option 1 in your bonus file describes a risk over money. It has two possible outcomes, one positive and one negative. On average, it pays zero.

An example of a risk over money is shown on the right. There is an urn with 100 balls, 20 red and 80 blue. The probability of drawing a red ball is thus 20% (20 out of 100) and the probability of drawing a blue ball is 80% (80 out of 100). If a red ball is drawn from the urn, you win £6.00. If a blue ball is drawn from the urn, you lose £1.50. This risk is not a risk that could be in your bonus file – it is just an example – but suppose for now that it is and determines your bonus.

The outcome of the risk (£6.00 or £-1.50) is determined at the end of the experiment, through a “virtual draw”:

  • You enter a number between 1 and 100. If you enter 72, for example, you virtually draw ball 72 from the (well-shuffled) urn on the right.
  • Verification.pdf will reveal whether ball 72 of this urn is red (so that you win £6.00) or blue (so that you lose £1.50).
  • As you will see, 20 numbers in Verification.pdf are winning numbers (i.e., refer to red balls) and 80 numbers are losing numbers (i.e., refer to blue balls). Therefore, your chance of entering a winning number is indeed 20%.

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